One third of all in-store payments will be contactless by 2020

Contactless payments are picking up the pace, and while still dominated by contactless cards, mobile wallet adoption is estimated to reach 450 million users by 2020, with Apple Pay accounting for 1 in 2 mobile wallets.

New data from leading fintech analysts, Juniper Research, estimates that driven by payment cards and mobile wallets, in-store contactless payments will reach $2 trillion by 2020, representing 15% of the total point of sale transactions. Contactless payments will exceed the $1 trillion mark for the first time in 2018, a year earlier than previously anticipated by Juniper.

An interesting footnote on that estimate is that Android today accounts for around 85-86 percent of the global smartphone market, compared with Apple’s iOS’s 14-15 percent. While frustrating for those who are not Apple, this shows how Apple benefits from keeping access to NFC proprietary while OEMs like Samsung competes with services like Google Pay and HCE-based wallets issued by financial institutions among others.

HCE-based wallets have also increased in popularity, with a plethora of banks launching their own wallets, while PayPal and Google have also introduced similar offerings. However, despite a growing number of bank wallets, adoption of these services has been relatively modest with reported user numbers rarely beyond tens of thousands.

Beyond in-store payments, the research forecasts rapid growth in contactless ticketing, especially in the European and North American markets where mobile wallets have been deployed. Juniper forecasts nearly 10 billion mobile contactless ticketing transactions, ie tickets purchased or validated, by 2022, with North America dominating the sector, followed by the Far East & China.